Fast-Track Exit & Winding Up for DPIIT Startups: 90-Day Liquidation Process under IBC 2016

90-Day Fast-Track Exit Framework for Startups under IBC 2016

Entrepreneurship inherently involves calculated risk-taking, and not every innovative venture achieves market-product fit. Recognizing that founders should be able to wind down unviable operations swiftly and redeploy capital without facing years of bureaucratic litigation, Section 55 to 58 of the Insolvency and Bankruptcy Code, 2016 (IBC) introduced the Fast-Track Voluntary Liquidation Process for startups.

For DPIIT-recognized startups, the liquidation timeline is compressed from the standard corporate timeframe of multiple years to just 90 days. An Insolvency Professional is appointed to liquidate remaining assets, discharge outstanding liabilities, and obtain a formal dissolution order from the National Company Law Tribunal (NCLT). KOKJAGUAR Consultancy helps Pune founders navigate legal wind-downs with total integrity. Read about our corporate closure advisory.

Key Steps in Fast-Track Startup Winding Up

1. Majority of directors submit a statutory declaration of solvency affirming that the company has no debts or will pay all debts within 90 days.
2. Special Resolution passed by shareholders within 4 weeks appointing an Insolvency Resolution Professional (IRP).
3. IRP notifies creditors, collects claims, and realizes remaining corporate assets.
4. Final statement of accounts prepared and approved by shareholders.
5. IRP files an application before NCLT Mumbai Bench for the formal dissolution order.